Asian Development Bank (ADB) | IAS Target IAS Target

Asian Development bank

The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966. ADB to promote social and economic development in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries. It aims to facilitate the economic development of countries in Asia. It also aims for an Asia and Pacific free from poverty.
The ADB was modeled closely on the World Bank and had a similar weighted voting system where votes were distributed in proportion with members' capital subscriptions. ADB is an official United Nations Observer. Japan and the United States hold the largest proportion of shares at 15.607%. China holds 6.444%, while India holds 6.331%. It provides hard loans to middle-income countries and soft loans to poorer countries.

Members ADB has 68 members
Headquarter Manila, Philippines
Report Asian Development outlook

Objectives and activities

  • It offers both Hard Loans and Soft loans.
  • The ADB offers “hard” loans from ordinary capital resources (OCR) on commercial terms.
  • The Asian Development Fund (ADF) affiliated with the ADB extends “soft” with concessional conditions.

The ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. This is carried out through investments – in the form of grants, loans, and information sharing – in infrastructure, health care services, financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.

Focus areas

Education Most developing countries in Asia and the Pacific have earned high marks for a dramatic rise in primary education enrollment rates in the last three decades, but daunting challenges remain, threatening social and economic growth.
Environment, Climate Change, and Disaster Risk Management Environmental Sustainability is a prerequisite for economic growth and poverty reduction in Asia and the Pacific.
Finance Sector Development The financial system is the lifeline of a country's economy. It creates prosperity that can be shared throughout society and benefit the poorest and most vulnerable people. Financial sector and capital market development, including microfinance, small and medium-sized enterprises, and regulatory reforms, is vital to decrease poverty in Asia and the Pacific.
Infrastructure, including transport and communications, energy, water supply and sanitation, and urban development.
Regional Cooperation and Integration Regional cooperation and integration (RCI) was introduced in 2004. It was seen as a long-standing priority of the Japanese government as a process by which national economies become more regionally connected. It plays a significant role in stepping up the economic growth, reducing poverty and economic discrepancy, raising productivity and employment, and strengthening institutions.
Private Sector Lending

Board of Governors:

  • It is the highest policy-making body of the bank.
  • It is composed of one representative from each member state.
  • The Board of Governors also elects the bank’s President who is the chairperson of the Board of Directors and manages ADB.

Resources of Asian Development Bank:

  • ADB raises funds through bond issues on the world’s capital markets.
  • Loans from ordinary capital resources, which account for 66% of cumulative Bank lending, are generally made to member countries which have attained a somewhat higher level of economic development
  • ADB also relies on its members’ contributions, retained earnings from its lending operations, and the repayment of loans.
  • The financial resources of the Bank consist of ordinary capital resources, comprising subscribed capital reserve and funds raised through Special Funds and borrowings, comprising contributions made by member countries, accrued net income and amounts formerly set aside from the paid-in capital.

India and ADB

India holds 6.331% shares. Asian Development Bank (ADB) has approved a $500-million loan to build a bridge across the Ganga in Bihar. The 9.8-km road bridge in Bihar will be India’s longest river bridge and will provide a vital transport link between the northern and southern parts of the State and neighbouring Nepal.